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It's been a heady time for high-yield bond investors. Their market is up 4.85% already in 2012. The default rate stands at just 2%. Investors have plowed $16.4 billion into junk funds and ETFs since early December, boosting prices even amid a recent glut of new issues.

If only this could last. Unlike equities, which in theory can keep gaining in perpetuity (or in reality, if you're Apple), gains for junk bonds typically reach price, yield and risk-premium limits. And two of those—price and yield—hint at a peak.

A week ago, the average junk bond's price hit 102.2 cents, according to a Bank of America Merrill Lynch index; by late last week, it had slipped to 101.55. Besides indicating a richly valued market, such prices can bring the risk of bonds being called. Provisions that let issuers prepay some bonds kick in at 103 cents on the dollar. If you're holding paper valued more than that, you risk a loss if it is called. So investors tend to shy away when prices approach 103 cents.

Valuations "are now getting constrained for many higher-quality callable bonds," writes Wes Sparks, who manages the Schroder ISF Global High Yield fund, in a note to investors. "We sold a number of bonds [in February] because we see little room for additional price appreciation."

Junk yields set an all-time low of 6.95% in 2005. Since then, the 7% mark has been virtually impenetrable. After dipping to 6.98% in late February, yields have rebounded to 7.19%. They also breached 7% last July, sliding to 6.995% when the average price hit 102.98 cents. The market promptly sold off dramatically, and yields hit 10.12% by October, as average prices plunged to 91.2 cents.

High-yield risk premiums, or spreads, remain more of a wild card. These gauge the relative risk of speculative-grade investing by quantifying how much you get paid versus owning ultra-safe Treasuries. But ultra-low Treasury yields complicate the equation.

Junk bonds now trade at 611 basis points—6.11 percentage points—over Treasuries with similar maturities, down roughly two percentage points in the past three months. That's still above historical averages. The all-time low spread was 2.41 percentage points in 2007, when much higher Treasury yields produced junk-bond yields of 7.4%.

In the minds of many investors, spreads now more than adequately compensate for current default rates, ergo high-yield bonds might not be too rich. "This leaves the [high-yield] market in a very peculiar position, where its spreads could still be viewed as relatively wide from the standpoint of our future default expectations, and yet its all-in yields are already closing on their historical lows," write analysts at Bank of America Merrill Lynch.

So junk may be running out of room for gains, even as spreads indicate otherwise and money keeps flowing in. As fully priced and risky assets, they're vulnerable to volatility and shifts in sentiment. Greg Hopper, who runs the Artio Global High Yield Fund calls high-yield "a strong market that's subject to nervous twitches."

All that said, junk could still be the best game in town, simply based on what it yields, compared to anything else. Just don't expect any more blockbuster quarters or capital gains anytime soon.

TREASURIES HAD AN OFF WEEK, what with Greece sorting out its debt swap and Friday's better-than-expected February jobs data. The benchmark 10-year notes lost ground, lifting yields to 2.030% from 1.983% a week ago.

The week even ended on a note of reassurance for the credit-default swaps market. An industry committee determined that because Greece's bond exchange had been forced upon some creditors, it constituted a credit event that triggers payment to investors who bought CDS, which are insurance-like contracts. (For more, see European Trader.)